USTR Issues "Notorious Markets" List

On February 28, 2011, the Office of the United States Trade Representative (USTR) issued a list of over 30 “notorious” Internet and physical sites that violate intellectual property rights. The “Out-of-Cycle Review of Notorious Markets” list was formerly part of the USTR’s annual “Special 301 Report” (due at the end of April), which reviews intellectual property rights protection and enforcement worldwide, pursuant to section 182 of the Trade Act of 1974 (19 U.S.C. 2242).

The list is divided into the following categories:

• pay-per-download (of pirated music);

• linking (to infringing websites);

• B2B and B2C (business-to-business and business-to-consumer sites that sell infringing goods;

• BitTorrent indexing (usable for the high-speed location and downloading from other users of allegedly infringing materials, even though the sites may also have lawful purposes);

• BitTorrent trackers (which, while they may be used for lawful purposes, can also be used to transfer allegedly infringing material by directing users to peers that share the infringing content);

• other web services (such as social media websites and cyberlockers);

• live sports telecast piracy; and

• Smartphone software.

China led the list in the combined number of websites and physical sites targeted, with nine attributed to China and one to Hong Kong. Among them are Baidu, “recently ranked as the number one most visited site in China, and among the top ten in the world,” and Taobao, “recently ranked in the 15 most visited sites in the world, and in the five most visited sites in China,” according to the USTR.

Baidu fell under the category of “linking” infringers; it is described as an online service that engages in “deep linking,” i.e., providing links to online sites with allegedly infringing materials, reportedly often stored on third-party host sites.

While recognizing that the B2B/B2C website Taobao had made “significant efforts” to deal with the problem of infringing goods being made available on its site, “it still has a long way to go,” the USTR stated, “in order to resolve those problems.”

TV Ants, a peer-to-peer service reportedly operated from China, was characterized as exemplifying live sports telecast piracy by making protected telecasts and broadcasts of sports events freely available on the Internet, and 91.com was listed as being “reportedly responsible for more than half” of all downloaded Smartphone software applications in China made available to the public without compensation to the rights holders.

Physical markets in China included the China Small Commodities Market (Yiwu); Luowu Market (Shenzhen), PC Malls (e.g., Hailong PC Mall in Beijing, Yangpu Yigao Digital Square in Shanghai), and the Silk Market (Beijing); the Ladies Market (Mongkok, Hong Kong) is also listed.

Russian websites also figure prominently on the list. Among them are clones of allofmp3 (“formerly the world’s largest server-based pirate music website,” shut down in 2007); vKontakte, said to be among the five most visited sites in Russia, which “permits users to provide access to allegedly infringing materials”; and the BitTorrent tracker Rutracker, “recently ranked among that country’s 15 most visited sites.”

As for physical sites, Savelovskiy electronics market in Moscow is said to have pirated goods “widely and openly available.”

Also on the list are the BitTorrent indexers ThePirateBay, one of the top 100 websites in both global and U.S. traffic and the target of a major criminal prosecution in Sweden, and Canada-based IsoHunt, the subject of civil litigation in both Canada and the United States and among the top 300 websites in global traffic, according to the USTR. (Id.) Among other physical markets listed are the “Red Zones” of Thailand, a number of shopping areas designated by the Thai authorities as sites requiring enforcement against piracy and counterfeiting.

The U.S. Chamber of Commerce welcomed expansion of the list to include rogue websites facilitating theft of intellectual property and also stated, “[t]his list will be a critical tool to help educate consumers about the dangers of rogue websites. It also shines a spotlight on the countries that appear to abide or attract these sites and signals USTR’s intent to raise concerns over the protection of IP online with those countries.”

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